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Addressing your personal finance weak spots

No matter what age you are it’s likely you have a financial weak spot. In fact, it’s pretty much inevitable, no one’s financial armour is infallible. What steps can you take to shore up your defences?

MONEY’S TOO TIGHT TO MENTION

Younger people are often struggling to save, let alone contribute towards a pension, whilst trying to afford a foot on the housing ladder and possibly paying off student debt. The repercussions of the financial crash, staggeringly high house prices and pay stagnation, are just some of the pressures this demographic has to contend with.

Classic weak spots for millennials tend to include budgeting and saving, mortgage affordability and debt. A recent study1 delved into millennials’ attitudes and behaviours around saving for retirement. The research found that only 8% ranked pension savings in their top two savings priorities.

Top tips include spending time working on budgeting skills, start small and often with savings and pension contributions, you’ll be surprised how quickly they add up. Don’t opt out of a workplace pension, look to maximise contributions, if possible. Work hard to reduce any debt, this is key to a successful mortgage application.

SQUEEZED MIDDLE

For the squeezed sandwich generation, struggling with the pressures of caring for children and possibly elderly parents, weak spots can include credit card debt, protection insurance and mortgage debt, plus retirement planning.

Debt levels are usually high, combined with high living expenses, often stifling savings opportunities. Retirement planning is a low priority and some mortgage holders are financially stretched with little protection if their income falls.

The best approach here is to take advice – by taking an holistic view of your finances, including your mortgage, savings, insurance, investments, pensions, and savings and protection, you are able to take control of your finances in one; an ultraefficient approach.

Also work on building savings, paying off debt, rediscover small pension pots you may have left behind when you switched jobs and consider consolidation. If you haven’t started a pension, it’s better late than never.

OVER 55 AND BEYOND

With the ability to access your pension from age 55, confronted with a range of options, you become the prime target for scammers. Often with healthy funds available, as time progresses financial vulnerability can creep in. Weak spots therefore include confusion regarding pension options, scams and losing confidence.

It’s really important to take time to understand the different options for withdrawing a pension by taking professional advice, never underestimate the value of advice. Be scam savvy, never respond to unsolicited approaches regarding your pension.

SELF-EMPLOYED

Not to be overlooked, the self-employed can belong to any generation. The UK now has a record number of self-employed workers, 4.86 million, representing more than one-inseven of all in employment2. Recent HMRC figures reported that personal pension saving amongst self-employed workers has fallen to an all-time-low of just 350,000. Pension saving for the self-employed is clearly a weak spot which needs prioritising.

1 Royal London, The Millennial Mosaic, Nov 2017
2 Aviva, Oct 2017

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.

The guidance and or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted to customers in the UK.

If you wish to register a complaint, please write to admin@springhillam.co.uk or telephone 01592 566453. A summary of our internal complaints handling procedures for the reasonable and prompt handling of complaints is available on request and if you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service at https://www.financial-ombudsman.org.uk or by contacting them on 0800 0234 567.